Merger and Acquisition

Merger, Acquisition, and International Strategies

Introduction

As economies have been recovering from great recession, companies have been looking for new methods and techniques in order to improve their growth in sales and expand their profitability. Majority of the companies comprises of strong cash position but their access to capital cost was low at time when target company valuations were attractive. This result in merger and acquisition which is a strategy that assists in achieving company aims and objective.

The focus of this paper to determine a company that had acquires another company and operates internationally and companies that solely operates and has no history of any merger or acquisitions.

Discussion

1. United Parcel Service (UPS) acquires Kiala

Acquisition occurs when company purchases or takes over another company. This take over is usually through purchasing 100% assets or ownership equity of the acquired entity. This strategy is commonly a part of company's growth strategy when company takeover existing operation so that they can expand their operations. This Acquisition can be either friendly or hostile. Friendly acquisition occurs with mutually agreement of two companies while hostile acquisition do not have similar condition rather they are forced to be acquires through purchasing large stakes (Coffey, Garrow, Holbeche, 2012).

United Parcel Service (UPS) is well known Courier company that has operations across the globe. This company is famous for brown trucks, internally known as package cars, beside this UPS have its own airline which his based in Louisville, Kentucky (United Parcel Service, Inc, 2011).

Kiala is Belgium based company that offers parcel delivery and return services to companies. This company was established in 2001 and operates in Luxembourg, Belgium, France, Netherlands and Spain. Kiala facilities online retailers in placing their orders close by stores for customer to collect (UPS Acquires Kiala, 2012).

The aim of UPS is to facilitate global commerce with strategies of investments in core business i.e. strengthening worldwide distribution and logistics and to increase their Package Delivery speed. For this, they need to have operation in difference countries. This can only accomplished with wither starting new operation in the particular country or through acquiring a company that has enough market and has weak operation or facing certain problems (United Parcel Service, Inc, 2011).

The reason for this acquisition by UPS was due to broaden their portfolio for business to consumer delivers along with increasing their operation in different region market. Their acquisition is linked with their vision and strategies. As Kiala has been serving up to 145000 packages each days to 7000 collection points, this will increase their service offerings to Luxembourg, Belgium, France, Netherlands and Spain(United Parcel Service, Inc, 2011).

This merger will benefit UPS in terms of wider and diversified portfolio and customers. As Kiala has fixed and permanent clients, this will increase their ability to generate cash along with sustaining growth rate. International merger will assist UPS in boosting Foreign Direct Investment - FDI, this makes easy for international investors to invest through acquisition in foreign ...